Random thoughts on market theories

There are a lot of market theories to help us how to trade. But I suggest you to develop your own theory.

That doesn't mean such theories are not good at all. But means a lot of people may fail to correctly understand other people's theory. This is very apparent ! for example, every body can get a book or theory on how to cook a good dish. But, 100 people can make 100 dishes with different taste after reading the same cook book. 

Applying the theory requires a much much deeper understanding of the theory. Some deeper things may be hard to express in the paper.

Take wave theory as another example:

1. Based on wave theory, we can extract that the market always up follows down and down follows up.   So we can draw several useful applications on it:

A. Buy at the end of the down wave
B. Sell at the end of the UP wave

2. Based on the wave theory, we can extract the ways to tell a major bull market from a bear market rally. Namely, 5 waves vs. 3 waves

Take the current US stock market as an application example: Since March's low up to date, there have been a two waves up and one minor correction wave in June and July. So keep these in mind and see how the market develops, We will have a clear picture of the market's direction.